FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 12: Accounting for Partnerships and Limited Liability Companies

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 71

Multiple Choice

Review LaterAdd Note

Review Later

Jackson and Campbell have capital balances of $100,000 and $300,000 respectively. Jackson devotes full time and Campbell one-half time to the business. Determine the division of $150,000 of net income in ratio of capital balances.

A) $75,000 and $75,000
B) $37,500 and $112,500
C) $100,000 and $50,000
D) $50,000 and $100,000

E) B) and D)
F) C) and D)

Correct Answer

verified

Show Answer

Question 72

Multiple Choice

Review LaterAdd Note

Review Later

As part of the initial investment, Omar contributes accounts receivable that had a balance of $22,500 in the accounts of a sole proprietorship. Of this amount, $2,000 is completely worthless. For the remaining accounts, the partnership will establish a provision for possible future uncollectible accounts of $1,500. The amount debited to Accounts Receivable for the new partnership is

A) $19,000
B) $22,500
C) $21,000
D) $20,500

E) C) and D)
F) None of the above

Correct Answer

verified

Show Answer

Question 73

Multiple Choice

Review LaterAdd Note

Compton and Danson form a partnership in which Compton contributes $70,000 in assets and agrees to devote half time to the partnership. Danson contributed $50,000 in assets and agrees to devote full time to the partnership. If no additional information is available, how will Compton and Danson share in the division of income?

.Daja and Whitnee had capital balances of $140,000 and $160,000 respectively at the beginning of the current fiscal year. The articles of partnership provide for salary allowances of $25,000 and $35,000 respectively, an allowance of interest at 12% on the capital balances at the beginning of the year, with the remaining net income divided equally. Net income for the current year was $120,000.

Franco and Elisa share income equally. During the current year the partnership net income was $40,000. Franco made withdrawals of $12,000 and Elisa made withdrawals of $17,000. At the beginning of the year, the capital account balances were: Franco capital, $42,000; Elisa capital, $58,000. Elisa's capital account balance at the end of the year is

Benton and Orton are partners who share income in the ratio of 1:3 and have capital balances of $70,000 and $30,000 respectively. Ramsey is admitted to the partnership and is given a 40% interest by investing $20,000. What is Benton's capital balance after admitting Ramsey?

Everett, Miguel, and Ramona are partners, sharing income 1:2:3. After selling all of the assets for cash, dividing losses on realization, and paying liabilities, the balances in the capital accounts are as follows: Everett, $50,000 Cr.; Miguel, $40,000 Dr.; and Ramona, $30,000 Cr. How much cash should be distributed to Everett assuming that Miguel pays the deficiency?

Franco and Jason share income and losses in a 2:1 ratio after allowing for salaries to Franco of $15,000 and $30,000 to Jason. If the partnership suffers a $15,000 loss, by how much would Jason's capital account increase?

Prior to liquidating their partnership, Craig and Jenny had capital accounts of $70,000 and $110,000, respectively. The partnership assets were sold for $285,000. The partnership had $25,000 of liabilities. Craig and Jenny share income and losses equally. Determine the amount received by Jenny as a final distribution from liquidation of the partnership.

Revenue per employee may be used to measure partnership (LLC) efficiency.

Which of the following is a disadvantage of a partnership when compared to a corporation?

Xavier and Yolonda have original investments of $50,000 and $100,000 respectively in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 15%, salary allowances of $22,000 and $20,000 respectively, and the remainder equally. How much of the net income of $90,000 is allocated to Xavier?

A ratio of 3:2:1 is the same as

Nick is admitted to an existing partnership by investing cash. Nick agrees to pay a bonus for his ownership interest because of the past success of the partnership. When Nick's investment in the partnership is recorded

Pia and Ramona are partners who share income in the ratio of 3:2. Their capital balances are $90,000 and $130,000 respectively. Income Summary has a credit balance of $40,000. What is Ramona's capital balance after closing Income Summary to Capital?

The process of winding up the affairs of a partnership is referred to as realization.

The partnership of Abraham Associates began operations on January 1, 2010, with contributions from two partners as follows: The following additional partner transactions took place during the year: Required: Prepare a statement of partnership equity for the year ended December 31, 2010.

One reason that distributions of income and loss are prepared is to obtain the information to record a closing entry.

When a new partner is admitted to a partnership, bonuses attributable to either the old partnership or to the incoming partner may be recognized in accordance with the agreement among the partners.

Douglas pays Selena $45,000 for her 30% interest in a partnership with total net assets of $125,000. Following this transaction, Douglas' capital account should have a credit balance of